On Monday (June 24th), the global market experienced a series of fluctuations, but gradually showed a new outlook. This article will combine the latest market data and analyst perspectives to provide an in-depth interpretation and analysis of the current global market situation.

US treasury bond bonds and interest rate expectations

After the fluctuation this year, the US treasury bond bond market began to gradually recover its stability with the signs of inflation and the cooling of the labor market. The market's expectation that the Federal Reserve may start cutting interest rates as early as September has to some extent boosted market sentiment. However, key indicators in the bond market indicate that high interest rates are likely to be maintained for the next five years, with 5-year forward contracts currently stagnant at 3.6%, which is higher than the Federal Reserve's own estimate of 2.75%. Renowned institutional analyst Troy Lutka pointed out that interest rates in the next 10 years may be higher than in the past 10 years, which will limit the Federal Reserve's ability to cut rates.

A heated discussion on neutral interest rates

The true level of neutral interest rates has become a hot topic in the market. Bob Elliott, CEO and Chief Investment Officer of Unlimited Funds, stated that economic growth has slowed down quite slowly, indicating a significant increase in neutral interest rates. The expected long-term existence of government budget deficits and increased investment in addressing climate change may lead to a reversal of the decades long trend of interest rate cuts. This change limits the upward potential of the bond market.

Resilience of financial markets

Although Federal Reserve Chairman Powell is cautious about whether neutral interest rates have been raised, the performance of financial markets shows resilience to policy. The S&P 500 index continues to hit new highs, demonstrating the market's ability to adapt to Federal Reserve policies. Jerome Schneider, Head of Short term Portfolio Management and Financing at Pacific Investment Management, stated that the market has shown incredible resilience in the face of higher actual returns.

Inflation expectations and PCE data

The market is closely monitoring the upcoming release of the US Personal Consumption Expenditure (PCE) Price Index, which is the preferred inflation measure by the Federal Reserve. It is expected that the annual growth rate of core PCE in May will drop to 2.6%, the lowest level in more than three years. This data will have a significant impact on market expectations for the Federal Reserve's interest rate cut. Analysts from the National Bank of Australia have warned that lower PCE results are needed to prevent an increase in annual growth rates for the remainder of this year.

Gold Market Vanguard

In the current global economic and financial market context, gold, as a traditional safe haven asset, its market performance is also closely monitored by investors. According to the latest market data, the price of gold has fluctuated for a period of time and is currently trading around $2325. Although the strength of the US dollar has put pressure on gold prices, investors still have expectations for possible interest rate cuts by the Federal Reserve, which provides some support for the gold market.

Renowned institutional analyst Kyle Rodda pointed out that if the core personal consumption expenditure (PCE) price index in the United States continues to be at a lower level, it may confirm that the Federal Reserve may cut interest rates twice this year, which will be a positive factor for gold. Lowering interest rates usually reduces the opportunity cost of holding unprofitable gold, which may attract more investors to turn to the gold market.

In addition, global geopolitical uncertainties, such as the debate in the US presidential election and the French election, may also lead to an increase in market risk aversion, further boosting the attractiveness of gold. Therefore, the future trend of the gold market will be influenced by various factors, including monetary policy, inflation expectations, geopolitical risks, etc.

Asian market dynamics

Asian markets showed a risk aversion at the beginning of this week. Most stock indexes fell, the US dollar rose, and the yield of US treasury bond bonds fell slightly. The weakness of the Japanese yen has put pressure on the Bank of Japan to raise interest rates, despite unstable domestic data. In addition, the increase in geopolitical risks, such as the debate in the US presidential election and the French election, has also added uncertainty to the market.

In summary, the global market presents a complex and ever-changing trend under the interweaving of various factors. The stability of the US treasury bond bond market, the hot discussion of neutral interest rate, the resilience of the financial market, the dynamics of the Asian market, inflation expectations and the performance of the commodity market are all key points that investors need to pay close attention to. The perspectives of analysts provide us with multiple perspectives, helping us better understand the underlying logic of the market.